Just raises $8M in its effort to beat Root at the car insurance game

Just Insure, a pay-per-mile insurance technology company, has raised $8 million in a funding round. 

CrossCut Ventures, ManchesterStory and Western Technology Investments co-led the investment, which brings its total raised to $15.3 million since its January 2019 inception.

Los Angeles-based Just says it uses telematics “to reward safe drivers and reduce insurer bias” by looking at factors such as how, when and where customers drive, rather than factors such as ZIP code or marital status as most traditional insurers do. Or put more simply, it charges customers only for miles driven and its rates vary based on driving behavior. This way, Just says it’s able to offer lower rates for “safer drivers,” and it claims to save its customers around 40% from their “previous auto insurance company.” For now, it’s only available in Arizona, although the company plans to expand to other markets such as Texas, Nevada, Pennsylvania, Ohio and Georgia.

Image Credits: Just Insure

Of course, Just is not the first company to offer personalized auto insurance. There’s Metromile, which launched its personalized pay-per-mile auto insurance in 2012. And there’s also Root Insurance, an Ohio-based car insurance startup that uses smartphone technology to understand individual driver behavior. Although there are similarities between Root and Just, there are also distinct differences, according to founder and CEO Robert Smithson.

Root charges customers a monthly fee, and when policies are renewed, the rate is subject to change based on driving behavior. Just has a similar model. If its drivers exhibits safe driving behavior, their rates can fall. On the other hand, if they exhibit dangerous behavior, their rates can rise. But unlike Root, Smithson said, Just only charges its “liability only” customers for miles driven. There is no monthly fee. For “full cover” customers, Just also includes a “small daily charge” to reflect the risk that someone could steal their car. For its part, MetroMile charges customers a base rate plus a per mile rate. Neither rate are affected by how a person drives, notes Smithson.

“The [Just] per mile price that a customer gets can change every month. This means we’re able to rapidly reward safe drivers with lower rates, and to increase them for those who drive less well,” Smithson said. “This rapid feedback loop encourages people to make smarter driving decisions. And it means that our customers have fewer accidents, and we do better. ”

In 2020, Root had a direct loss ratio of 82%. Just’s direct loss ratio is 65.8% year to date so far. But of course, it has far fewer customers and is only serving one market. Still, the company says that it has already achieved underwriting profitability in terms of what portion of premium to it pays out in claims.

Also, with so many people shifting to working from home over the last year, Just says it has seen increased demand this year. It issued over 1,000 new policies in the second quarter, up “tenfold” compared to the same period in 2020. The startup said during that same time, its revenue climbed 1,400% compared to the second quarter of 2020

“People are simply driving less as a result of increased work-from-home rates, and this isn’t changing anytime soon,” Smithson said. “Our approach enables us to offer customers rates that are truly reflective of their driving.”

The company likens its user experience to that of a prepaid phone card. Just customers can “load up” their account for $30 for minimum liability-only coverage and $75 for full coverage to start driving. The company’s insurance policy is for 30 days. So as customers drive, their balance declines. Every 30 days, the company changes each customer’s price as it gathers more data about their driving habits.

It’s an approach that Matt Kinley, co-founder and managing partner at ManchesterStory, had never before seen.

“It is more fair, affordable and customized across the board, and unique because the company offers customers rates that are actually reflective of their driving, which rewards safe drivers with lower insurance premiums,” he said.

The company plans to use its new capital in part to do some hiring — it currently has a staff of 35 — and scale its product offering. It is also planning to launch beyond Arizona into neighboring states. In particular, Smithson said the startup is “keen” to launch in Texas.

#apps, #crosscut-ventures, #finance, #funding, #fundings-exits, #insurance-technology, #insurtech, #just, #los-angeles, #manchesterstory, #recent-funding, #startup, #startups, #transportation, #venture-capital, #western-technology-investments

YouTube TV expands its live TV service with more Spanish-language networks

Google’s streaming TV service, YouTube TV, announced today it’s adding more Spanish-language networks to its base membership package and is preparing to launch an add-on package that will include even more Spanish-language content. Starting today, all subscribers will gain access to three new TV networks at no additional cost: Univision, UniMás, and Galavisión. These will join YouTube TV’s existing lineup of over 85 live TV channels, which today include top networks like Fox, ABC, CBS, NBC, PBS, and others, in addition to entertainment networks like those from Discovery and ViacomCBS.

The additions will bring to YouTube TV members a range of new Spanish-language content, including primetime series like “La Desalmada” and “Vencer El Pasado” arriving this fall, reality competition series “Nuestra Belleza Latina” on September 26, plus the 22nd Annual Latin Grammy Awards on November 18. The additions also bring sports programming like the Campeones Cup on September 29, and ongoing match-ups from Liga MX, UEFA Champions League, MLS, and the Mexican National Team, the company says.

Univision also noted that subscribers in top Hispanic markets, including Los Angeles, New York, Miami, Houston, Dallas, Chicago, and others, will be able to access Univision and UniMás’ local news, weather, and other programming. Plus, YouTube TV will carry Univision’s video-on-demand content library at launch, and subscribers will be able to use their YouTube TV credentials to authenticate with the company’s “TV everywhere”-powered Univision app.

The companies did not disclose the financial terms of their new agreement, but the deal hasn’t come with a price increase. YouTube TV, however, has been steadily hiking prices since its debut. It increased the service’s pricing to $64.99 last summer, following the new additions of 14 ViacomCBS networks, for example. But last month, YouTube Chief Product Officer Neal Mohan said there would be no new price increases in the near-term.

While the new channels will reach all subscribers, YouTube TV also announced plans to introduce a new add-on package that will be available for an additional monthly cost. This will include other Spanish-language networks like Sony Cine, CNN Español, Discovery en Español, Estrella TV, Cinelatino, Fox Deportes, and others. YouTube TV is not yet sharing the full lineup nor the price of the add-on just yet, but said it would offer more details in the “coming months.”

The Spanish-language network Pantaya will also be offered in the weeks ahead for an additional $5.99 per month, providing access to Spanish-language movies and exclusive original series, all of which are on-demand.

“We are delighted to partner with YouTube TV to expand Univision’s robust portfolio of networks and stations to include YouTube TV,” said Hamed Nasseri, Univision Vice President, Content Distribution, in a statement. “Amid the popularity of streaming services as well as the growing influence of our Hispanic community, this is an important step to ensure that our audience has access to our leading Spanish-language news, sports, and entertainment wherever they consume content. We are excited for today’s launch and recognize YouTube TV’s continued commitment to serving our growing and influential Hispanic audience.”

YouTube TV is not the first streamer to cater to an audience looking for Spanish-language content. In 2018, Hulu added its own Spanish-language bundle called ‘Español,’ which now gives subscribers live programming from networks including ESPN Deportes, NBC Universo, CNN En Español, History Channel En Español, Discovery en Español, and Discovery Familia. Hulu, however, doesn’t carry Univision but does offer Telemundo. Fubo TV, meanwhile, offers Univision and Telemundo and provides an Español plan with dozens of Spanish-language channels.

If anything, YouTube TV had been behind in terms of catering to Spanish speakers until now, and this offering will make it more competitive with rival services.

 

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SpotOn raises $300M at a $3.15B valuation and acquires Appetize

Last year at this time, SpotOn was on the brink of announcing a $60 million Series C funding round at a $625 million valuation.

Fast forward to almost exactly one year later, and a lot has changed for the payments and software startup.

Today, SpotOn said it has closed on $300 million in Series E financing that values the company at $3.15 billion — more than 5x of its valuation at the time of its Series C round, and significantly higher than its $1.875 billion valuation in May (yes, just three and a half months ago) when it raised $125 million in a Series D funding event.

Andreessen Horowitz (a16z) led both the Series D and E rounds for the company, which says it has seen 100% growth year over year and a tripling in revenue over the past 18 months. Existing investors DST Global, 01 Advisors, Dragoneer Investment Group, Franklin Templeton and Mubadala Investment Company too doubled down on their investments in SpotOn, joining new backers Wellington Management and Coatue Management. Advisors Douglas Merritt, CEO of Splunk, and Mike Scarpelli, CFO of Snowflake, also made individual investments as angels. With the new capital, SpotOn has raised $628 million since its inception.

The latest investment is being used to finance the acquisition of another company in the space — Appetize, a digital and mobile commerce payments platform for enterprises such as sports and entertainment venues, theme parks and zoos. SpotOn is paying $415 million in cash and stock for the Los Angeles-based company.

Since its 2017 inception, SpotOn has been focused on providing software and payments technology to SMBs with an emphasis on restaurants and retail businesses. The acquisition of Appetize extends SpotOn’s reach to the enterprise space in a major way. Appetize will go to market as SpotOn and will work to grow its client base, which already includes an impressive list of companies and organizations including Live Nation, LSU, Dodger Stadium and Urban Air. 

In fact, Appetize currently covers 65% of all major league sports stadiums, specializing in contactless payments, mobile ordering and menu management. So for example, when you’re ordering food at a game or concert, Appetize’s technology makes it easier to pay in a variety of contactless ways through point of sale (POS) devices, self-service kiosks, handheld devices, online ordering, mobile web and API integrations.

Image Credits: SpotOn

SpotOn is taking on the likes of Square in the payments space. But the company says its offering extends beyond traditional payment processing and point-of-sale software. Its platform aims to give SMBs the ability to run their businesses “from building a brand to taking payments and everything in between.” SpotOn’s goal is to be a “one-stop shop” by incorporating tools that include things such as custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital loyalty.

The combined company will have 1,600 employees — 1,300 from SpotOn and 300 from Appetize. SpotOn will now have over 500 employees on its product and technology team, according to co-founder and co-CEO Zach Hyman. It will also have clients in the tens of thousands, a number that SpotOn says is growing by “thousands more every month.”

The acquisition is not the first for SpotOn, which also acquired SeatNinja earlier this year.

But in Appetize it saw a company that was complementary both in its go-to-market and tech stacks, and a “natural fit.”

SMEs are going to benefit from the scalable tech that can go with them, including things like kiosks and offline modes, and for the enterprise clients of Appetize, they’re going to be able to leverage products like sophisticated loyalty programs and extended marketing capabilities,” Hyman told TechCrunch. 

SpotOn was not necessarily planning to raise another round so soon, Hyman added, but the opportunity came up to acquire Appetize.

“We spent a lot of time together, and it was too compelling to pass up,” he told TechCrunch.

For its part, Appetize — which has raised over $77 million over its lifetime, according to Crunchbase — too saw the combination as a logical one.

“It was important to us to retain a stake in the business. We were not looking to cash out,” said Appetize CEO Max Roper. “We are deeply invested in growing the business together. It’s a big win for our team and our clients over the long term. This is a rocketship that we are excited to be on.” 

No doubt that the COVID-19 pandemic only emphasized the need for more digital offerings from small businesses to enterprises alike.

“There has been a high demand for our services and now as businesses are faced with a Covid resurgence, no one is closing down,” Hyman said. “So they see a responsibility to install the necessary technology to properly run their business.”

One of the moves SpotOn has made, for example, is launching a vaccination alert system in its reservation management software platform to make it easier for consumers to confirm they are vaccinated for cities and states that have those requirements.

Clearly, a16z General Partner David George too was bullish on the idea of a combined company.

He told TechCrunch that the two companies fit together “extremely nicely.”

“It felt like a no-brainer for us to want to lead the round, and continue to support them,” George said.

Since first investing in SpotOn in May, the startup’s growth has “exceeded” a16z’s expectations, he added.

“When companies are growing as fast as it is organically, they don’t need to rely on acquisitions to fuel growth,” he said. “But the strategic rationale here is so strong, that the acquisition will only turbocharge what is already high growth.”

While the Series E capital is primarily funding the acquisition, SpotOn continues to double down on its product and technology.

“This is our time to shine and invest in the future with forward thinking technology,” Hyman told TechCrunch. “We’re thinking about things like how are consumers going to be ordering their beer at a Dodgers game in three years? Are they going to be standing in line for 25 minutes or are they going to be interacting and buying merchandise in other unique ways? Those are the things we’re looking to solve for.”

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GrubMarket gobbles up $120M at a $1B+ pre-money valuation to take on the grocery supply chain

When people talk about “online food delivery” services, chances are that they’ll think of the Uber Eats, Instacarts and Getirs of this world. But today a startup that’s tackling a different aspect of the market — addressing the supply chain that subsequently turns the wheels of the bigger food distribution machine — is announcing a big round of funding as it continues to grow.

GrubMarket, which provides software and services that help link up and manage relationships between food suppliers and their customers — which can include wholesalers and other distributors, markets and supermarkets, delivery startups, restaurants, and consumers — has picked up $120 million in a Series E round of funding.

The funding is coming from a wide mix of investors. Liberty Street Funds, Walleye Capital, Japan Post Capital, Joseph Stone Capital, Pegasus Tech Ventures, Tech Pioneers Fund are among the new backers, who are being joined by existing investors Celtic House Asia Partners, INP Capital, Reimagined Ventures, Moringa Capital Management, and others, along with other unnamed participants

Mike Xu, GrubMarket’s founder and CEO (pictured, above), tells me that the company is currently profitable in a big way. It’s now at a $1 billion annualized run-rate, having grown revenues 300% over last year, with some markets like New York growing even more (it went from less than $10 million ARR to $100 million+).

With operations currently in Arizona, California, Connecticut, Georgia, Michigan, New York, New Jersey, Missouri, Massachusetts, Oregon, Pennsylvania, Texas, and Washington, and some 40 warehouses nationwide. GrubMarket had a pre-money valuation of over $1 billion, and now it will be looking to grow even more, both in terms of territory and in terms of tech, moving ahead in a market that is largely absent from competitors.

“We are still the first mover in this space,” Xu said when I asked him in an interview about rivals. “No one else is doing consolidation on the supply chain side as we are. We are trying to consolidate the American food supply chain through software technologies, while also trying to find the best solutions in this space.”

(And for some context, the $1 billion+ valuation is more than double GrubMarket’s valuation in October 2020, when it raised $60 million at a $500 million post-money valuation.)

Longer term, the plan will be to look at an IPO provisionally filing the paperwork by summer 2022, Xu added.

GrubMarket got its start several years ago as one of many companies looking to provide a more efficient farm-to-table service. Tapping into a growing consumer interest in higher quality, and more traceable food, it saw an opportunity to build a platform to link up producers to the consumers, restaurants and grocery stores that were buying their products. (Grocery stores, incidentally, might be independent operations, or something much bigger: one of GrubMarket’s biggest customers is Whole Foods, which uses GrubMarket for produce supply in certain regions of the U.S. It is currently is the company’s biggest customer.)

As we wrote last year, GrubMarket — like many other grocery delivery services — found that the pandemic initially provided a big fillip, and a big rush of demand, from that consumer side of the business, as more people turned to internet-based ordering and delivery services to offset the fact that many stores were closed, or they simply wanted to curtail the amount of shopping they were doing in-person to slow the spread of Covid-19.

But fast forward to today, while the startup still serves consumers, this is currently not the primary part of its business. Instead, it’s B2B2C, serving companies that in turn serve consumers. Xu says that overall, demand from consumers has dropped off considerably compared to a year ago.

“We think that restaurant re-openings have meant more people are dining out again and spending less time at home,” Xu said, ” and also they can go back to physical grocery stores, so they are not as interested as they were before in buying raw ingredients online. I don’t want to offend other food tech companies, but I think many of them will be seeing the same. I think B2C is really going to slow down going forward.”

The opening for GrubMarket has been not just positioning itself as a middleman between producers and buyers, but to do so by way of technology and consolidating what has been a very regionalized and fragmented market up to now.

GrubMarket has snapped up no less than 40 companies in the last three years. While some of these have been to help it expand geographically (it made 10 acquisitions in the Los Angeles area alone), many have also been made to double down on technology.

These have included the likes of Farmigo, once a Disrupt Battlefield contender that pivoted into becoming a software provider to CSAs (an area that GrubMarket sees a lot of opportunity), as well as software to help farms manage their business staffing, insurance and more: Pacific Farm Management is an example of the latter.

GrubMarket’s own in-house software, WholesaleWare, a cloud-based service for farmers and other food producers, saw its sales grow 3,500% over the last year, and it is now managing more than $4 billion in wholesale and retail activity across the U.S. and Canada.

There will be obvious ways to extend what GrubHub does deeper into the needs of its customers on the purchasing end, but this is in many ways also a very crowded market. (And not just crowded, but crowded with big companies. Just today, Toast, the company that builds software for restaurants, filed for a $717 million IPO at potentially a $16.5 billion valuation.) So instead, GrubHub will continue to focus on what has been a more overlooked aspect, that of the suppliers.

“I am focused on the food supply chain,” Xu said. “Operators in the food supply chain business most of the time don’t have any access to software and e-commerce technology. But we are not just a lightweight online ordering system. We do a lot of heavyweight lifting around inventory management, pricing and customer relations, and even HR management for wholesales and distributors.” That will also mean, longer term, that GrubMarket will likely also start to explore connected hardware to help those customers, too: robotics for picking and moving items are on that agenda, Xu said.

“GrubMarket has built a profitable, high-growth business underpinned by its best-in-class technology platform that’s reinventing how businesses access healthy, fresh foods,” said Jack Litowitz, director of strategic investments at Reimagined Ventures, in a statement. “We’re proud to support GrubMarket as it continues to expand into new regions and grow its WholesaleWare 2.0 software platform. At Reimagined Ventures, we always seek to invest in businesses that are disrupting inefficient industries in innovative ways. Mike Xu and the GrubMarket team have built one of these businesses. We’re excited to back their vision and work in making the food supply chain more efficient.”

“GrubMarket is transforming the trillion-dollar food distribution industry with unprecedented speed by implementing advanced digital solutions and operational discipline. The company’s scale, growth, and profitability are extraordinarily impressive. Pegasus is delighted and honored to be part of GrubMarket’s exciting journey ahead,” added Bill Reichert, partner at Pegasus Tech Ventures.

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Performance marketing agency MuteSix bets on content and data to boost DTC e-commerce

Warby Parker filing to IPO last week was one more sign that direct-to-consumer (DTC) is an extremely powerful e-commerce trend. But LA-based performance marketing agency MuteSix didn’t wait that long to build its business around scaling DTC brands.

Created in 2014 and acquired by Dentsu in 2019, MuteSix was recommended to TechCrunch by Rhoda Ullmann, VP Consumer at Sense, a Boston-based startup building a home energy monitor. “They demonstrate best-in-class expertise with Facebook and Google paid ad platforms. They also have a very smart and efficient approach to creative development that was critical to helping us scale,” she wrote. (If you have growth marketing agencies or freelancers to recommend, please fill out our survey!)

Besides Sense, MuteSix’s former and current clients include companies such as Adidas, Petco, Ring and Theragun, to whom it provides a full range of marketing services, including top-notch direct response videos. But regardless of whether you can afford this, we think you’ll learn interesting lessons from our conversation with their CRO, Greg Gillman. The key takeaway? In today’s highly competitive ad environment, both content and data are kings.

Editor’s note: The interview below has been edited for length and clarity.

What can you tell us about MuteSix as an agency?

Greg Gillman

Image Credits: MuteSix

Greg Gillman: We’ve been around for about nine years. We started out as a Facebook ad agency — as opposed to a lot of agencies that start out by saying they do everything, we decided to focus on what we were really good at. At the time, it was doing Facebook media buying for e-commerce companies. Primarily here in LA, which is kind of the hub of these companies, but also all over. And then bit by bit, we grew the organization.

At this point, we’re a little over 400 people, and we manage upward of $500 million in spend on Facebook and Google, including Instagram and YouTube. What we’ve grown into is a one-stop shop for DTC e-commerce companies: We manage all the channels that a DTC brand needs. And we’re a performance agency; everything we do is based on results. People come to us to drive revenue into their e-commerce businesses.

Why do you think that performance marketing is the right fit for DTC?

DTC entrepreneurs are more focused on immediate impact, because if they’re not selling product, there’s no large brand propping them up. So I think that doing DTC marketing requires you to be more performance focused. For agencies that work with large brands, usually it’s more about impression buying versus performance buying. They can say: I did a reach campaign today to hit 10 million eyeballs, and whatever happens happens, because at the end of the day, you just told us to do 10 million impressions. It’s different than working with a group like us that’s trying to optimize every small piece of the funnel, and being accountable for the entire funnel to drive as much sales or revenue.

What type of clients do you work with?

The majority of the companies we work with are digitally native DTC companies. We’ve mostly stayed in that lane, because we’re really good at it. That being said, we work with companies of all sizes — startups, companies that are already established, and very large companies that need to rework both their creative and their media buying strategy.

I oversee sales, marketing and partnerships, and my role is really trying to figure out which brands make most sense to partner with MuteSix. We’re looking for high-growth brands that we can scale, and we’ve learned through the years that what works well are demonstrable products that have cool user value props.

We’ve worked with lots of startups at different points in the funnel, starting from the ground up and working with them through various rounds of funding, all the way through acquisitions, including two by unicorns. But these days, ground up is tougher. I like them to have some proof of concept — putting through $10,000-$15,000 per month on Facebook or $5,000-10,000 on Google usually shows me that there’s some life to it. But I don’t want to limit us if it’s a cool idea. I talk to a lot of people who come back once they’ve proven it out a little bit.


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What kind of clients are definitely not a good fit?

It won’t be a fit if there’s no real unique value prop for the product. If it’s just another run-of-the-mill company, a consultant can charge them a lower amount of money and set up Facebook ads, but what we are looking for are high-growth businesses.

The compensation for our campaign managers is actually tied to the performance of the campaigns, so if I bring a bunch of campaigns that we can’t scale, we’re gonna have a lot of unhappy media buyers who ask: “Greg, why would we take on this brand?” It’s a business model that has helped us attract top talent, but we need to make sure that we’re bringing brands that we think we can scale.

And it’s easier than ever to start a company, but it’s tougher now to scale it and take it past the $2 million-$3 million run rate. So I always revert back to asking founders: What are five reasons why people want to buy your product? What are the five reasons that they don’t? If the entrepreneur has trouble answering this, it’s not going to work. If they can’t tell somebody why their business is good, then we’re not going to be good at selling it.

How is MuteSix different from other agencies?

I’d say the main difference is that we have a 70-person in-house video creative team; and what we’re really good at doing is shooting and coming up with performance content. Not just content that looks and feels great, but video that is reverse-engineered to sell product.

Another key component is that we have a whole data science team that is also integrated with our media buying team, and that helps companies navigate things like attribution and signal loss due to the iOS 14 update. Right now, that means focusing on looking at the whole picture rather than by channel and working on mix-modeling attribution.

What are some of the things your data team focuses on?

One of the biggest things that brands struggle with is figuring out attribution, and how you continue to spend money even though you may have lost some signal into the platform. If Facebook skews too heavily, and Google is on last click, then sometimes it looks like things are never working. To help companies make informed business decisions, we are building statistical models that show information at higher-than-the-platform level.

We are also building better segments of customer profiles that help the clients understand who their core audience is, but also helps us build predictive audiences for finding new people.

Another big thing we’re trying to solve is incrementality. We work with large brands that have a strong organic following on social media; and their question is: “Hey, Greg, why should I spend more money if I would have acquired those users anyway?” So we’ve done incrementality testing with brands that spend a lot in other channels than Facebook and Google. We helped them build out different ways to look at the data so that we continue to spend in those channels and they actually know the incremental lift that they’re getting.

There’s one other piece that I think is super important and usually overlooked: first-party data. We work with brands to try and acquire as much of that first-party data as possible, segment it and use it, because that’s what they’d be left with if Facebook shut off tomorrow.

How do you prepare and adapt for changes in the marketing ecosystem?

Because we work with so many brands, we have a lot of senior leadership on each channel level. We routinely meet across departments and share insights. The data science team also builds pretty robust reporting. We try to stay ahead of our brands and to be forward-thinking about anything that is ultimately going to impact the agency. We’re constantly trying to hack our way through things like the types of content that work and things that we know will help us scale.

That’s how we have always approached it. Every major shift in our business was done to answer the needs of the brands that we were working with. For instance, there’s a data side to our business because it’s more important than ever to use that. Facebook used to be a platform where you could throw anything at the wall, and you would get a 4x or 5x return. No one’s asking about data when you’re literally printing money out of Facebook, right? It only happens when the margins get tight. But then Facebook became a more crowded platform, and the same happened with Google: more advertisers, higher CPM and a more competitive environment. We needed to be smarter about what we were doing, so we built out our data team.

Now there’s two levers that we can pull: the data side and the creative side of the business. Again, we are a performance marketing agency, focusing on all the levers. Because platforms like Facebook are only going to be more competitive, they’re only going to get more expensive, and we are only going to lose more traffic. So the more agile agencies have to think much farther outside of what we are doing on these platforms; because we’re going to make up the incremental revenue on things like SMS, influencer marketing and organic content, to continue to drive money into the top of the funnel.

Why is your content arm so important as a lever?

We have an integrated solution where our media buyers are paired directly with our video editors and producers to allow us to be agile and quick; because as everyone knows, content is king. What we try to do is optimize around things like what we call the thumbs-up rate on Facebook — three-second video views. If I held someone for that long in their newsfeed, I can potentially get them into our flow. We do the same on YouTube, and we do things like this on programmatic, because the name of the game is to get people into the funnel and work them through it. And we’re using both our data science team and our creative team to build out and optimize on the front end around these quick metrics to get things moving.

In my opinion, there’s no close second to an SMB agency that has a content arm like we do. Leveraging our content team to build performance content is one of the biggest levers that we have. Three and a half years ago, Facebook was telling us: “If you don’t build video content, and if you don’t prioritize video in the newsfeed, it’s not going to work.” At the time, we leaned in very hard — and the pain of growing a creative team of 70 people is real, especially in LA. But it’s allowed us to scale our agency.

#content-marketing, #d2c, #d2c-brands, #dtc, #e-commerce, #facebook, #growth-marketing, #los-angeles, #marketing, #online-advertising, #startups, #tc, #tc-experts, #verified-experts

A bug in a medical startup’s website put thousands of COVID-19 test results at risk

A California-based medical startup that provides COVID-19 testing across Los Angeles has pulled down a website it used to allow customers to access their test results after a customer found a vulnerability that allowed access to other people’s personal information.

Total Testing Solutions has ten COVID-19 testing sites across Los Angeles, and processes “thousands” of COVID-19 tests at workplaces, sports venues, and schools each week. When test results are ready, customers get an email with a link to a website to get their results.

But one customer said they found a website vulnerability that allowed them to access other customers’ information by increasing or decreasing a number in the website’s address by a single digit. That allowed the customer to see other customers’ names and the date of their test. The website also only requires a person’s date of birth to access their COVID-19 test results, which the customer who discovered the vulnerability said “wouldn’t take long” to brute-force, or simply guess. (That’s just 11,000 birthday guesses for anyone under age 30.)

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Although the test results website is protected by a login page that prompts the customer for their email address and password, the vulnerable part of the website that allowed the customer to change the web address and access other customers’ information could be accessed directly from the web, bypassing the sign-in prompt altogether.

The customer passed on details of the vulnerability to TechCrunch to get the vulnerability fixed before someone else finds it or exploits it, if not already.

TechCrunch verified the customer’s findings, but while we did not enumerate each result code, through limited testing found that the vulnerability likely put around 60,000 tests at risk. TechCrunch reported the vulnerability to TTS chief medical officer Geoffrey Trenkle, who did not dispute the number of discovered tests, but said the vulnerability was limited to an on-premise server used to provide legacy test results that has since been shut down and replaced by a new cloud-based system.

“We were recently made aware of a potential security vulnerability in our former on-premises server that could allow access to certain patient names and results using a combination of URL manipulation and date of birth programming codes,” said Trenkle in a statement. “The vulnerability was limited to patient information obtained at public testing sites before the creation of the cloud-based server. In response to this potential threat, we immediately shut down the on-premises software and began migrating that data to the secure cloud-based system to prevent future risk of data breach. We also initiated a vulnerability assessment, including the review of server access logs to detect any unrecognized network activity or unusual authentication failures.”

Trenkle declined to say when the cloud server became active, and why the allegedly legacy server had test results as recently as last month.

“Currently, TTS is not aware of any breach of unsecured protected health information as a result of the issues with its prior server. To our knowledge, no patient health information was actually compromised, and all risk has been mitigated going forward,” said Trenkle.

Trenkle said the company will comply with its legal obligations under state law, but stopped short of explicitly saying if the company plans to notify customers of the vulnerability. Although companies aren’t obliged to report vulnerabilities to their state’s attorney general or to their customers, many do out of an abundance of caution since it’s not always possible to determine if there was improper access.

TTS chief executive Lauren Trenkle, who was copied on an email chain, did not comment.

#attorney-general, #california, #computer-security, #covid-19, #cyberwarfare, #hacking, #health, #jamaica, #los-angeles, #privacy, #security, #software-testing, #tts, #vulnerability

Link-in-bio monetization platform Snipfeed raises a $5.5M seed round

The link-in-bio business is heating up as more mobile website builders compete for a coveted slice of real estate on a creator’s TikTok, Instagram, or Twitter. Linktree leads the space, securing a recent $45 million Series B raise to build out e-commerce features, but Beacons boasts competitive creator monetization tools with just a $6 million seed round in May. Now, Snipfeed enters the ring with its own $5.5 million seed round, including investments from CRV, Abstract Ventures, Crossbeam (Ali Hamed), id8, Michael Ovitz (founder of CAA), Michael Bosstick, Diaspora Ventures, and others.

Linktree has been around since 2016 and has more funding than its up-and-coming competitors. But for creators seeking to monetize their following, these newer platforms may be more attractive to some creators, since they already have built-in tools to help them monetize their followings. Linktree currently supports tipping on the platform for users subscribed to its $6 Linktree Pro platform, but Snipfeed offers a wider range of monetization options; some creators are making over $20,000 per month on the platform, according to CEO and co-founder Rédouane Ramdani.

Snipfeed started as a content discovery platform with 44,000 weekly active users — but when Snipfeed added a creator monetization tool to its platform, it became its most popular feature. So, in February 2020, with little to no funding left, the company completely pivoted to its current link-in-bio business. Since then, Snipfeed has amassed 50,000 registered users, with the user base growing 500% in the last six months (Linktree, for comparison, has over 12 million users).

Based in Paris and Los Angeles, Snipfeed’s 15-person staff is particularly interested in the “long tail” of creators, which it says encompasses over 46 million people.

“Content creator doesn’t necessarily mean you’re going to be the next Addison Rae or a TikTok star,” explained Ramdani. “It means that you might be a doctor or lawyer, and on top of that, you’re going to have a TikTok where you explain how to file your taxes and that kind of stuff. They have this expertise, and they’re wondering, ‘How can I turn that into a side-hustle?’”

Image Credits: Snipfeed

In addition to a standard tipping tool, Snipfeed allows users to sell digital goods, like on-demand video, ebooks, access to livestreams, and one-on-one consultations. But Snipfeed’s biggest differentiator is its Cameo-like system for selling personalized content. For example, TikToker maylikethemonthh uses Snipfeed to sell asynchronous, video-recorded tarot readings. While asking a single, personalized astrology question costs $5, a more in-depth reading can cost up to $20 or $40.

Snipfeed is free to set up, but if you make sales, the company takes 15% — this percentage is inclusive of any transaction fees. Through Snipfeed’s referral program, creators can make 5% of sales from anyone they onboard to the platform (this comes out of Snipfeed’s commission).

“We decided to go with this model because we really want to have a relationship where we help the creators really make money. We only make money if they make money,” Ramdani said.

If a creator or celebrity were to sell personalized videos on Cameo, they’d lose 25% to the platform. Meanwhile, Beacons takes 9% of sales from its free version, and 5% from its $10 per month version, which offers more customization, integrations, analytics.

Image Credits: Snipfeed

Still, depending on the type of creator, the features that each link-in-bio startup offers might matter more than the cost. Beacons allows users to share a shopping-enabled TikTok feed, which could be huge a money-maker for creators that often share product recommendations with affiliate links, which give them a commission from sales. Ramdani said that astrologers have been particularly successful on Snipfeed, since fans can book a variety of asynchronous services at a wide range of prices. But these features could benefit any creator who can profit from answering followers’ specific questions — a chef could offer recipe ideas based on what’s in a fan’s fridge, or a life coach could make a personalized video if a follower requests advice.

With its $5.5 million in seed funding, Snipfeed plans to build out its e-commerce tools so that creators can sell physical products on their link-in-bio (Beacons and Linktree are also working on this with their recent funding rounds — but Beacons’ and Snipfeed’s seed rounds are small compared to Linktree’s Series B). The company also wants to develop educational content to show its users how to best monetize their platform — if Snipfeed can help its creators make money, then it’ll make more money too.

#abstract-ventures, #ali-hamed, #apps, #beacons, #caa, #crossbeam, #founder, #instagram, #lawyer, #link-in-bio, #linktree, #los-angeles, #michael-ovitz, #monetization, #paris, #real-estate, #social-media, #software, #tiktok, #video-hosting, #website, #world-wide-web

Abodu raises $20M to build prefabricated backyard homes

The need for more affordable housing has never been more urgent as a shortage in the U.S. housing market persists.

Startups attempting to help address the shortage in a variety of ways abound. One such startup, Abodu, has raised $20 million in a Series A funding round led by Norwest Venture Partners. Previous backer Initialized Capital also participated in the financing, along with Redfin CEO Glenn Kelman, former Stockton, California Mayor Michael Tubbs, GGV investor Hans Tung and Paradox Capital’s Kyle Tibbitts.

The California legislature changed laws in 2017 to make it easier to build Accessory Dwelling Units (ADUs). Then on January 1, 2020, the state of California made it dramatically easier to add extra housing units to single-family home sites. Cities and local agencies have to quickly approve or deny ADU projects within 60 days of receiving a permit application. The state also now prevents cities from imposing minimum lot size requirements, maximum ADU dimensions or off-street parking requirements. 

Redwood City, California-based Abodu, which builds prefabricated ADUs, was founded in 2018 to serve as a “one-stop shop” for building an ADU, or as some describe it, a home in a backyard.

Image Credits: Co-founders John Geary and Eric McInerney / Abodu

What sets the company apart from others in the space, its execs claim, is that it not only builds and installs the units, it helps homeowners with the painful process of getting permits. Abodu says it pre-approves its structural engineering with California state-level agencies to ensure its units can be built statewide and works with local agencies to pre-approve its foundation systems to ensure projects can proceed on predictable timelines.

It also claims to offer a cheaper and faster process than if one were to build an ADU from start to finish. Specifically, the startup claims that one of its backyard homes can be installed in just 10% of the time it would take for a traditional ADU to be built. 

Abodu has been active in the market, selling and building its ADUs since the fall of 2019. Since then, it has put “dozens and dozens” of units in the ground, and has multiple dozen units in production on top of that, according to CEO and co-founder John Geary. So far, it’s operating in the Bay Area, Los Angeles and Seattle. The company claims it can deliver an ADU in as little as 30 days in San Jose and Los Angeles thanks to the cities’ pre-approval process. In other cities in California and Washington, turnaround is “as little as 12 weeks.” But a standard bespoke project takes 4-5 months from start to finish, according to Geary.

The startup’s three products include a 340-square foot studio; a 500-square foot one bedroom, one bath, and a 610-square foot two bedroom unit. All have kitchens and living space.

Pricing starts at $190,000, but the average project cost across all sizes is around $230,000, Geary said, inclusive of permits and site work.

There are a variety of use cases for ADUs, the most popular of which is to house family and for rental income. 

“During the pandemic, multigenerational living has been at an all-time high. There are acute family needs that people are trying to solve for,” Geary said. “In addition, folks are earning extra money by renting them out to members of the community such as teachers or fireman, a single person or younger couple.”

Next, Abodu is eyeing the San Diego market.

Earlier this week, we covered the recent raise of Mighty Buildings, another Bay Area-based startup building ADUs and other housing. The biggest difference between the two companies, according to Geary, is that Mighty Buildings is focused on innovation in construction with its 3D-printed method. 

“We decided early on that we didn’t want to reinvent the wheel from the construction standpoint,” Geary said. “Instead, we looked at ‘how can we solve for speed and ease?’ ”

Abodu operates with an asset-light model, and doesn’t own any factories. Instead, it has built a network of factory “partners” across the Western U.S. that builds its units depending on how their capacities look at any given time.

Naturally, the company’s investors are bullish on the company’s business model.

Jeff Crowe, managing partner of Norwest Venture Partners, believes that Abodu’s “beautifully crafted units” are just one of the company’s selling points.

“John, Eric, and their team manage the end-to-end process of permitting, building, and installing on behalf of their customers,” he told TechCrunch. “And with the expedited permitting that Abodu has been granted in over two dozen cities, it has faster time-to-installation than other ADU market participants.  The result has been very high levels of customer satisfaction and rapid growth.”

Former Stockton Mayor Tubbs said Abodu is tackling two of California’s most consequential issues: the statewide housing shortage and its impacts on racial and economic segregation in our neighborhoods.

“By making it fast and accessible for normal homeowners to build high-quality backyard housing units, Abodu’s success will mean integrating options for both renters and homeowners in the same neighborhoods, while supporting small landlords and property owners in building equity in their homes,” he wrote via email.

Abodu’s success would be a win-win that strengthens communities.

He went on to describe the speed that Abodu can deliver housing units to customers in certain parts of California “astounding.” 
“Abodu’s team has done some of the most difficult legwork for property owners by building local contractor relationships with reliable, vetted, high-quality partners,” he said. “As a homeowner myself, I know the challenges of permitting and finding contractors during construction. It’s this thoughtful attention to detail and customer trust that sets Abodu apart from other similar offerings.”

 

#abodu, #adu, #affordable-housing, #california, #funding, #fundings-exits, #glenn-kelman, #hans-tung, #initialized-capital, #jeff-crowe, #los-angeles, #norwest, #norwest-venture-partners, #real-estate, #recent-funding, #redwood-city, #san-jose, #seattle, #startup, #startups, #tc, #united-states, #urban-planning, #venture-capital, #washington

FlyMachine raises $21 million to build a virtual concerts platform for a post-pandemic world

As concerts and live events return to the physical world stateside, many in the tech industry have wondered whether some of the pandemic-era opportunities around virtualizing these events are lost for the time being.

San Francisco-based FlyMachine is aiming to seek out the holy grail of the digital music industry, finding a way to capture some of the magic of live concerts and performances in a live-streamed setting. The startup hopes that pandemic era consumer habits around video chat socialization combined with an industry in need of digital diversification can push their flavor of virtual concerts into the lives of music fans.

The startup’s ambitions aren’t cheap, FlyMachine tells TechCrunch it has raised $21 million in investor funding to bankroll its plans. The funding has been led by Greycroft Partners and SignalFire, with additional participation from Primary Venture Partners, Contour Venture Partners, Red Sea Ventures, and Silicon Valley Bank.

The virtual concert industry didn’t have as big of a lockdown moment as some hoped for. Spotify experimented with virtual events. Meanwhile, startups like Wave raised huge bouts of VC funding to turn real performers into digital avatars in a bid to create more digital-native concerts. And while some smaller artists embraced shows over Zoom or worked with startups like Oda who created live concert subscriptions, there were few mainstream hits among bigger acts.

To make FlyMachine’s brand of virtual concerts a thing, the startup isn’t trying to convert potential in-person attendees of a show into virtual participants, instead hoping to create an attractive experience for the folks who would normally have to skip the show. Whether those virtual attendees were too far from a venue, couldn’t get a babysitter for the night, or just aren’t jazzed about a mosh pit scene anymore, FlyMachine is hoping there are enough potential attendees on the bubble to sustain the startup as they try to blur the lines between “a night in and a night out,” CEO Andrew Dreskin says.

The startup’s strategy centers on building up partnerships with name brand concert venues around the US — Bowery Ballroom in New York City, Bimbo’s 365 Club in San Francisco, The Crocodile in Seattle, Marathon Music Works in Nashville and Teragram Ballroom in Los Angeles, among them — and live-streaming some of the shows at those venues to at-home audiences. FlyMachine’s team has deep roots in the music industry, Dreskin founded Ticketfly (acquired by Pandora) while co-founder Rick Farman is also the co-founder of Superfly which puts on the Bonnaroo and Outside Lands music festivals.

In terms of actual experience — and I had the chance to experience one of the shows before writing this — FlyMachine has done their best to recreate the experience of shouting over the tunes to talk with your buddies nearby. In FlyMachine’s world this is attending the show in a “private room” with your other friends live-streaming in video chat bubbles from their homes. It’s well-done and doesn’t distract too much from the actual concert, but you can adjust the sound levels of your friends and the music when the time calls for it.

FlyMachine’s platform launch earlier this year, arriving as many Americans have been vaccinated and many concert-goers are preparing to return to normal, might have been considered a bit late to the moment, but the founding team sees a long-term opportunity that COVID only further highlighted.

“We weren’t in a mad dash to get the product out the door while people were sequestered in their homes because we knew this would be part of the fabric of society going forward,” Dreskin tells TechCrunch.

#articles, #ceo, #co-founder, #concert, #contour-venture-partners, #entrepreneurship, #greycroft-partners, #los-angeles, #microsoft-windows, #nashville, #new-york-city, #oda, #operating-systems, #primary-venture-partners, #red-sea-ventures, #san-francisco, #seattle, #silicon-valley-bank, #spotify, #startup-company, #superfly, #tc, #techcrunch, #ticketfly, #united-states, #virtual-concert

Apple is opening a store in downtown LA’s nearly 100-year-old Tower Theatre

This Thursday, Apple will mark the opening of a new store in downtown Los Angeles. The space occupies the newly renovated Tower Theatre, which opened in DTLA’s Broadway Theater District in 1927. Among other milestones, the 900-seat theater was the first in LA to be wired for the talkies, hosting a premier of “The Jazz Singer” that same year. Not for nothing, it was also the first theater in the city with air conditioning.

Apple Tower Theatre is actually the company’s 26th store in greater LA. Obviously, though, moving into a 94-year-old theater takes a fair bit more work than, say, a shopping mall. The store has been in the works for a number of years, owing in part to having to work with the city to restore a space that had been declared a landmark.

Image Credits: Apple

Interestingly, an LA Times article back in 2018 noted that the space, “may also serve as a declaration that Apple intends to compete as a major Hollywood content creator.” In hindsight, fair enough. Apple TV+ launched late the following year.

The theater has actually been largely unoccupied since 1988, which clearly meant even more work had to go into shining up the walls and making the grand old theater presentable for that modern retail vibe — not to mention a seismic upgrade to help make it more earthquake proof.

The company also notes that it took care to maintain some of the space’s more iconic elements.

Image Credits: Apple

“Apple Tower Theatre anchors the corner of Eighth Street and Broadway, where visitors will immediately recognize the fully restored clock tower, recreated Broadway marquee, clean terra cotta exterior, and renovated historic blade sign,” Apple writes. “After walking through the Broadway doors, guests enter the monumental lobby inspired by Charles Garnier’s Paris Opera House, featuring a grand arched stairway with bronze handrails flanked by marble Corinthian columns.”

The store’s opening also marks the launch of Apple’s new Creative Studios initiative. The LA store and a location in Beijing will be the first to get the program. In its initial form, it will run between eight and 12 weeks, providing a group of mentors from the creative arts.

Image Credits: Apple

“Creativity and access to education are core values for Apple, so we are absolutely thrilled to kick off today at Apple Creative Studios in Los Angeles and Beijing and to bring this meaningful program to several more cities this year,” SVP Deirdre O’Brien said in a press release. “Building on our long history of using stores as a venue to host local artists to educate and inspire, Creative Studios is one more way we’re providing free arts education to those who need it most.”

Last week, Google launched its first retail store in Manhattan’s Chelsea district. The Apple Tower Theatre location opens at 10 a.m. local time on Thursday, June 24. The company says it’s employing nearly 100 to keep the store running.

 

#apple, #apple-store, #ecommerce, #los-angeles, #retail

Fintech giant Klarna raises $639M at a $45.6B valuation amid ‘massive momentum’ in the US

Just over three months after its last funding round, European fintech giant Klarna is announcing today that it has raised another $639 million at a staggering post-money valuation of $45.6 billion.

Rumors swirled in recent weeks that Klarna had raised more money at a valuation north of $40 billion. But the Swedish buy now, pay later behemoth and upstart bank declined to comment until now.

SoftBank’s Vision Fund 2 led the latest round, which also included participation from existing investors Adit Ventures, Honeycomb Asset Management and WestCap Group. The new valuation represents a 47.3% increase over Klarna’s post-money valuation of $31 billion in early March, when it raised $1 billion, and a 330% increase over its $10.6 billion valuation at the time of its $650 million raise last September. Previous backers include Sequoia Capital, SilverLake, Dragoneer and Ant Group, among others.

The latest financing cements 16-year-old Klarna’s position as the highest-valued private fintech in Europe.

In an exclusive interview with TechCrunch, Klarna CEO and founder Sebastian Siemiatkowski said the company has seen explosive growth in the U.S. and plans to use its new capital in part to continue to grow there and globally.

In particular, over the past year, the fintech has seen “massive momentum” in the country, with more than 18 million American consumers now using Klarna, he said. That’s up from 10 million at the end of last year’s third quarter, and up 118% year over year. Klara is now live with 24 of the top 100 U.S. retailers, which it says is “more than any of its competitors.”

Overall, Klarna is live in 20 markets, has more than 90 million global active users and more than 2 million transactions a day conducted on its platform. The company’s momentum can be seen in its impressive financial results. In the first quarter, Klarna notched $18.1 billion in volume compared to $9.9 billion in the prior year first quarter. In all of 2020, it processed $53 billion in volume. To put that into context; Affirm’s financial report in May projected it would process $8.04 billion in volume for the entire fiscal year of 2021 and Afterpay is projecting $16 billion in volume for its entire fiscal year. 

March 2021 also represented a record month for global shopping volume with $6.9 billion of purchases made through the Klarna platform.

Meanwhile, in 2020, Klara hit over a billion in revenue. While the company was profitable for its first 14 years of life, it has not been profitable the last two, according to Siemiatkowski, and that’s been by design.

“We’ve scaled up so massively in investments in our growth and technology, but running on a loss is very odd for us,” he told TechCrunch. “We will get back to profitability soon.”

Klarna has entered six new markets this year alone, including New Zealand and France, where it just launched this week. It is planning to expand into a number of new markets this year. The company has about 4,000 employees with several hundred in the U.S. in markets such as New York and Los Angeles. It also has offices in Stockholm, London, Manchester, Berlin, Madrid and Amsterdam. 

While Klarna is partnered with over 250,000 retailers around the world (including Macy’s, Ikea, Nike, Saks), its buy now, pay later feature is also available direct to consumers via its shopping app. This means that consumers can use Klarna’s app to pay immediately or later, as well as manage spending and view available balances. They can also do things like initiate refunds, track deliveries and get price-drop notifications.

“Our shopping browser allows users to use Klarna everywhere,” Siemiatkowski said. “No one else is offering that, and are rather limited to integrating with merchants.”

Image Credits: Klarna

Other things the company plans to do with its new capital is focus on acquisitions, particularly acqui-hires, according to Siemiatkowski. According to Crunchbase, the company has made nine known acquisitions over time — most recently picking up Los Gatos-based content creation services provider Toplooks.ai.

“We’re the market leader in this space and we want to find new partners that want to support us in this,” Siemiatkowski told TechCrunch. “That gives us better prerequisites to be successful going forward. Now we have more cash and money available to invest further in the long term.”

Klarna has long been rumored to be going public via a direct listing. Siemiatkowski said that the company in many ways already acts like a public company in that it offers stock to all its employees, and reports financials — giving the impression that the company is not in a hurry to go the public route.

“We report quarterly to national authorities and are a fully regulated bank so do all the things you expect to see from public companies such as risk control and compliance,” he told TechCrunch. “We’re reaching a point for it to be a natural evolution for the company to IPO. But we’re not preparing to IPO anytime soon.”

At the time of its last funding round, Klarna announced its GiveOne initiative to support planet health. With this round, the company is again giving 1% of the equity raised back to the planet.

Naturally, its investors are bullish on what the company is doing and its market position. Yanni Pipilis, managing partner for SoftBank Investment Advisers, said the company’s growth isfounded on a deep understanding of how the purchasing behaviors of consumers are changing,” an evolution SoftBank believes is only accelerating. 

Eric Munson, founder and CIO of Adit Ventures, said his firm believes the “best is yet to come as Klarna multiplies their addressable market through global expansion.” 

For Siemiatkowski, what Klarna is trying to achieve is to compete with the $1 trillion-plus credit card industry.

We really see right now all the signs are there. True competition is coming to this space, this decade,” he said. “This is an opportunity to genuinely disrupt the retail banking space.”

 

#amsterdam, #ant-group, #apps, #bank, #berlin, #bnpl, #buy-now-pay-later, #europe, #finance, #fintech, #france, #funding, #fundings-exits, #ikea, #klarna, #london, #los-angeles, #macys, #madrid, #manchester, #market-leader, #money, #new-york, #new-zealand, #nike, #payments, #recent-funding, #sebastian-siemiatkowski, #sequoia-capital, #softbank-investment-advisers, #softbank-vision-fund-2, #stockholm, #united-states, #venture-capital

Mythical Games raises $75M to build an NFT game engine

Even as NFT sales dip below their most speculative highs, startups aiming to tap into their potential are still scoring big funding rounds from investors who believe there’s much more to crypto collectibles than the past few months of hype.

Mythical Games, an NFT games startup based out of Los Angeles, has banked a $75 million raise from new and existing investors betting on the startup’s aim to expand the ambitions of their first title and locate a substantial platform opportunity amid helping developers build blockchain-based gaming experiences.

The round was led by WestCap. Existing investors were joined by 01 Advisors, Bilibili, Gary Vaynerchuk, the Glazer family, Moore Capital, and Redbird Capital in the Series B funding. The startup has raised a whopping $120 million to date.

The company has been building a title called Blankos Block Party that seems to be Fall Guys meets Roblox meets Funko Pop. The PC game capitalizes on a number of big social gaming trends around user-created content, while adding in a marketplace where users can buy avatar figures and accessories crafted by a variety of artists and designers that Mythical has partnered with. Users can buy or sell the limited run or open edition items through their marketplace. Unlike some other NFT platforms, the goods live on a private blockchain so they can’t be re-sold on public marketplace platforms like OpenSea.

Mythical Games is part of a growing movement to bring blockchain-based game mechanics mainstream while leaving behind elements of crypto platforms that are seen as less ready for primetime. Users can purchase avatars on the platform with cryptocurrency through BitPay but they can also pay with a credit card. Users don’t need to walk through the mechanics of setting up a wallet or writing down a seed phrase either.

While the company has big hopes for Blankos as it onboards more users, the bigger investor opportunity is likely in the game engine that the team is building. The startup’s “Mythical Economic Engine” is being designed to help budding game builders create NFT-based marketplaces that won’t get them in any regulatory trouble, marrying compliance across geographies and tools that help creators comply with anti-money laundering laws and know-your-customer frameworks.

“With any new market like [NFTs], it goes through all these different cycles,” Mythical Games CEO John Linden tells TechCrunch. “We think this will actually change gaming for the long haul. The more we talk to game studios, we’re finding more and more potential use cases.”

#advisors, #articles, #bilibili, #bitpay, #blockchain, #ceo, #computing, #cryptocurrencies, #cryptocurrency, #decentralization, #financial-technology, #funko, #gary-vaynerchuk, #los-angeles, #roblox, #tc, #technology, #westcap

Eano’s Stella Wu is not your typical construction tech startup founder

Renovating a home is an exciting, yet often fraught-filled, endeavor.

One startup that aims to help make the process simpler, cheaper and less stressful by helping people manage the home renovation process has raised $6 million to help it grow even faster. Builders VC led the round, which included participation from Celtic, Newfund and Wish co-founder Danny Zhang, who also sits on Eano’s board.

Stella Wu, who formerly worked as a growth product manager at Wish, got firsthand experience of the pain points related to the process when she bought her own house in 2017.

“I realized there were a lot of fragmented issues in the renovation space, especially when it came to the individual workers,” she recalls. “They were not reliable and bad at communication.”

So in 2019 she founded Eano, a San Francisco-based startup that aims to walk a homeowner through a renovation and help connect individual contractors with new clients. Eano also works on projects like building ADUs (accessory dwelling units).

As more people spent time at home last year due to the COVID-19 pandemic, the startup saw its contract revenue spike by 5x, Wu says. And in the first quarter of this year, business was up 70% year over year.

Image Credits: Eano CEO and founder Stella Wu / Eano

Eano, she said, offers competitive and transparent pricing so that homeowners aren’t surprised as a remodeling project goes on. Its automated process tracks all communications and progress in one place and the company has grown what it describes as a “network of experienced, local professionals” that are fully licensed, vetted and insured that it pairs homeowners with on projects.

“There’s all these individual contractors out there and even though they are very affordable, it’s very hard for them to get to the homeowners, as they don’t have much resources,” Wu, a Chinese immigrant, told TechCrunch. “So they come to us and we basically take care of it all.” For now, Eano is operating in the Bay Area and Los Angeles, with plans to expand to Seattle and Houston this year.

The company plans to take its new capital and “go deep into the product side.”

Once they become a client, homeowners can use Eano to select a certain remodeling package, and then they can check the project progress, communicate with the team and even see the progress through videos.

“We’re also helping contractors make communicating and receiving payment much easier,” Wu said. “We’re also helping these individual contractors increase the brand, and helping them with the administration and customer support side with our software.”

Jim Kim of Builders VC, said he first encountered Wu and Jung while they were at Wish.

“We invest in people, and when you can find extremely talented entrepreneurs who have built successful companies and still have the hunger to win, you jump in with a blank check,” he said. “We love Eano’s mission — combining a similar product sourcing strategy as Wish with technology to bring a better experience to all constituents in the antiquated construction industry.”

Kim is also impressed by the fact that Wu is driven to prove “that you don’t need to be a 55-year-old man wearing steel-toed boots to have a meaningful impact on construction.”

“We love that ethos — it matches with our thinking about backing entrepreneurs who don’t fit into the stereotypical box,” Kim said.

#builders-vc, #construction-tech, #danny-zhang, #eano, #economy, #entrepreneurship, #funding, #fundings-exits, #home-improvement, #houston, #jim-kim, #los-angeles, #newfund, #private-equity, #proptech, #real-estate, #recent-funding, #renovation, #san-francisco, #seattle, #startup-company, #startups, #tc, #venture-capital, #wish

Xbox teams up with Tencent’s Honor of Kings maker TiMi Studios

TiMi Studios, one of the world’s most lucrative game makers and is part of Tencent’s gargantuan digital entertainment empire, said Thursday that it has struck a strategic partnership with Xbox.

The succinct announcement did not mention whether the tie-up is for content development or Xbox’s console distribution in China but said more details will be unveiled for the “deep partnership” by the end of this year.

Established in 2008 within Tencent, TiMi is behind popular mobile titles such as Honor of Kings and Call of Duty Mobile. In 2020, Honor of Kings alone generated close to $2.5 billion in player spending, according to market research company SensorTower. In all, TiMi pocketed $10 billion in revenue last year, according to a report from Reuters citing people with knowledge.

The partnership could help TiMi build a name globally by converting its mobile titles into console plays for Microsoft’s Xbox. TiMi has been trying to strengthen its own brand and distinguish itself from other Tencent gaming clusters, such as its internal rival LightSpeed & Quantum Studio, which is known for PUBG Mobile.

TiMi operates a branch in Los Angeles and said in January 2020 that it planned to “triple” its headcount in North America, adding that building high-budget, high-quality AAA mobile games was core to its global strategy. There are clues in a recruitment notice posted recently by a TiMi employee: The unit is hiring developers for an upcoming AAA title that is benchmarked against the Oasis, a massively multiplayer online game that evolves into a virtual society in the fiction and film Ready Player One. Oasis is played via a virtual reality headset.

Xbox’s latest Series X and Series S are to debut in China imminently, though the launch doesn’t appear to be linked to the Tencent deal. Sony’s Playstation 5 just hit the shelves in China in late April. Nintendo Switch distributes in China through a partnership with Tencent sealed in 2019.

Chinese console players often resort to grey markets for foreign editions because the list of Chinese titles approved by local authorities is tiny compared to what’s available outside the country. But these grey markets, both online and offline, are susceptible to ongoing clampdown. Most recently in March, product listings by multiple top sellers of imported console games vanished from Alibaba’s Taobao marketplace.

#asia, #call-of-duty, #china, #gadgets, #gaming, #honor-of-kings, #los-angeles, #nintendo, #nintendo-switch, #player, #ready-player-one, #tencent, #video-games, #video-gaming, #virtual-reality, #xbox

Canada’s newest unicorn: Clio raises $110M at a $1.6B valuation for legal tech

Clio, a software company that helps law practices run more efficiently with its cloud-based technology, announced Tuesday it has raised a $110 million Series E round co-led by T. Rowe Price Associates Inc. and OMERS Growth Equity.

The round propels the Vancouver, British Columbia-based company to unicorn status, valuing it at $1.6 billion. Clio last raised in September of 2019 when it brought in $250 million in a Series D financing. With the latest funding, Clio claims that it’s the “first legal practice management unicorn” globally. The investment also brings its total capital raised since its 2008 inception to $386 million.

Founder and CEO Jack Newton says he and Rian Gauvreau launched Clio during the 2008 recession after seeing the struggles solo lawyers and small firms faced when running a business. Historically, legal practice management software was limited to server-based solutions designed for enterprise businesses — not small law firms, Newton said. Clio was formed to change that.

Clio co-founders Jack Newton and Rian Gauvreau; Image courtesy of Clio

“Much like how Microsoft Windows defined the operating system for personal computers decades ago, Clio has developed a software platform for law firms and their clients that is cloud-based and client-centric by design,” Newton said.

The company’s platform aims to serve as “an operating system” for lawyers, offering cloud-based legal practice management, client intake and legal CRM software. Clio has more than 150,000 customers across 100 countries. Many of the lawyers using Clio are smaller and solo practitioners, but the company also serves larger firms such as Locks Law and King Law.

Newton said his vertical SaaS company helps legal professionals be more productive, grow their firms and “make legal services more accessible.” It also aims to help clients find lawyers more easily and vice versa.

Image Credits: Clio

Newton was tight-lipped about the company’s financials, saying only that since its 2019 raise, the company has seen “explosive” growth. That growth was only fueled by the COVID-19 pandemic and its push toward all things digital. He added that its current valuation was “fair,” and achieved through a “thorough” vetting process.

Clio has focused on building out its core technology to an industry that has historically relied on pen and paper in many cases. It has also aimed to make legal technology more affordable for lawyers to use.

While change has been gradual, COVID-19 forced lawyers to fundamentally reevaluate how they run their law firms and how they deliver legal services to their clients, Newton said.

“Many firms realized that storing client data at the office was no longer an option as teams became distributed during COVID-19,” he added. “Lawyers and legal professionals who had hesitated to adopt technology in the past were suddenly forced to rapidly adapt to this new reality. While this technological change is in response to the crisis, it’s an enduring change.”

In 2018, Clio made its first acquisition with its buy of Lexicata, a Los Angeles-based legal tech startup. The company plans to do more acquisitions with the capital, according to Newton. The company plans to use its new capital to continue investing in its platform as well as toward strategic partnerships. (Clio currently has partnered with over 150 apps.)

Clio also plans to, naturally, do some hiring. Specifically, it plans to boost its headcount by 40%, or 250 employees, with a focus on bolstering its product and engineering teams. (Clio currently has 600 employees.)

“Over the next few years we intend to completely redefine the way legal services are delivered and democratize access to legal aid by way of the cloud,” Newton told TechCrunch. “This investment allows us to expedite our plans and offer even more to our existing customers.”

Clio in particular is growing in the EMEA markets with a current focus on the United Kingdom and Ireland.

In a written statement, OMERS Growth Equity managing director Mark Shulgan said his firm has been following Clio for a number of years.

“We believe Clio has clearly established itself as a market-leading legal tech firm, and will deliver growth for decades to come,” he said.

#canada, #cars, #clio, #cloud, #cloud-computing, #crm, #funding, #fundings-exits, #ireland, #law-firm, #law-firms, #legal-services, #legal-tech, #legal-technology, #los-angeles, #microsoft-windows, #omers-growth-equity, #operating-system, #recent-funding, #saas, #software, #software-platform, #startups, #t-rowe-price, #vancouver, #venture-capital

SoftBank bets big on a ‘digital Ellis Island’

Welcome Tech, which has built a digital platform aimed at immigrants and their families, has raised $35 million in a Series B funding round co-led by TTV Capital, Owl Ventures and SoftBank Group Corp.’s SB Opportunity Fund.

Crosscut Ventures, Mubadala Capital, Next Play Capital and Owl Capital also participated in the financing, which brings the Los Angeles-based company’s total raised to $50 million since its 2010 inception. Welcome Tech, which has an office in San Antonio, Texas, raised an $8 million Series A in March of 2020.

Built by immigrants for immigrants, Welcome Tech aims to do just what its name indicates — help immigrants feel more welcome, have an easier transition and achieve greater success when moving to the United States.

The company’s approach was different in that rather than launch a banking product and then set out to earn the trust of the community it aims to serve, it first worked hard to earn that trust and understand the community’s needs. 

So in its first years of existence, Welcome Tech has focused on building out a platform that provides educational resources, information and services that “they need to thrive in a  new country.” Its efforts are initially primarily focused on the Hispanic community in the U.S.

The goal of its platform, dubbed SABEResPODER (meaning Knowledge is Power in Spanish), is to serve as “a widely recognized and trusted resource” to members of the Hispanic community in the U.S., the company says.

Armed with knowledge and data that it has gathered over the years, Welcome Tech six months ago launched a banking service, including a debit card and bilingual mobile app. And in January, it launched a monthly subscription offering that gives users access to discounted resources such as medical and dental professionals.

Gardiner Garrard, co-founder and partner, TTV Capital, points out that the Hispanic market represents the largest minority cohort in the U.S., with a population of 62.8 million. 

“That said, less than half of Hispanic households are ‘fully banked’, meaning they cannot open an account, which then negatively impacts their ability to secure other products or services,” Garrard said. “To not serve this community is a major failure. Welcome Tech is addressing this issue head on.”

Today, Welcome’s platform is approaching 3 million active users, according to co-founder and CEO Amir Hemmat. Its ultimate goal, he said, is to serve as “digital Ellis Island.” 

“The way we leave immigrants’ success to chance is pretty crazy,” he told TechCrunch. “If you think of countries the way you think of companies and the way they want to attract and retain…here, we almost do the opposite.”

Image Credits: Welcome Tech

In particular, Hemmat and co-founder Raul Lomeli-Azoubel recognized that access to financial services was crucial to immigrants’ success.

“Although we ultimately see ourselves building towards a better future for immigration and a broader platform, the foundation and beachhead for that is definitely in financial services,” Hemmat said.  

Welcome offers a free banking account that is fully bilingual for English and Spanish speaking communities with “key features that are very tailor made for this community.”

A number of new digital banks targeting Latino and immigrant communities in general have emerged in recent years, including TomoCredit and Greenwood. Welcome aims to differentiate itself from competitors in being a more broad-based platform. Its subscription offering — at $10 a month — does things like offer discounts to healthcare professionals and free televisits, for example.

“When we dug in, we realized that immigrants are not being provided data-driven recommendations,” Hemmat said. “It’s very much a word of mouth and trial of error, and in some cases highly predatory, experience. We’re working to aggregate a historically fragmented audience and that gives us massive leverage to source better offerings, pricing and experiences for consumers across multiple categories.”

The company plans to use its new capital to build more partnerships so that it can do the above, as well as spread awareness about its services.

Gosia Karas, vice president and head of growth-stage investments at SoftBank’s Opportunity Fund, told TechCrunch that the fact that the immigrant population in the U.S. is “growing really fast and underserved creates an opportunity for someone to come in and serve them well with a financial services offering.”

In particular, SoftBank was attracted to Welcome Tech’s approach to truly understand, and gather data around, its target market.

“Before even jumping head first into building a fintech company, they did a lot of work prior,” Karas said. “They spent years building an understanding of this audience of the immigrant population, including building trust within that demographic. And at the same time, they have been building targeted content. This serves as a really great backbone to build a company that is very well-suited to serve that audience and to roll out things like the debit card and other financial services offerings.”

#bank, #banking, #crosscut-ventures, #debit-card, #diversity, #economy, #finance, #financial-services, #fintech, #funding, #fundings-exits, #greenwood, #los-angeles, #mubadala-capital, #owl-capital, #owl-ventures, #recent-funding, #softbank-group, #startups, #tc, #ttv-capital, #united-states, #venture-capital, #vodafone, #welcome-tech

Saltbox raises $10.6M to help booming e-commerce stores store their goods

E-commerce is booming, but among the biggest challenges for entrepreneurs of online businesses are finding a place to store the items they are selling and dealing with the logistics of operating.

Tyler Scriven, Maxwell Bonnie and Paul D’Arrigo co-founded Saltbox in an effort to solve that problem.

The trio came up with a unique “co-warehousing” model that provides space for small businesses and e-commerce merchants to operate as well as store and ship goods, all under one roof. Beyond the physical offering, Saltbox offers integrated logistics services as well as amenities such as the rental of equipment and packing stations and access to items such as forklifts. There are no leases and tenants have the flexibility to scale up or down based on their needs.

“We’re in that sweet spot between co-working and raw warehouse space,” said CEO Scriven, a former Palantir executive and Techstars managing director.

Saltbox opened its first facility — a 27,000-square-foot location — in its home base of Atlanta in late 2019, filling it within two months. It recently opened its second facility, a 66,000-square-foot location, in the Dallas-Fort Worth area that is currently about 40% occupied. The company plans to end 2021 with eight locations, in particular eyeing the Denver, Seattle and Los Angeles markets. Saltbox has locations slated to come online as large as 110,000 square feet, according to Scriven.

The startup was founded on the premise that the need for “co-warehousing and SMB-centric logistics enablement solutions” has become a major problem for many new businesses that rely on online retail platforms to sell their goods, noted Scriven. Many of those companies are limited to self-storage and mini-warehouse facilities for storing their inventory, which can be expensive and inconvenient. 

Scriven personally met with challenges when starting his own e-commerce business, True Glory Brands, a retailer of multicultural hair and beauty products.

“We became aware of the lack of physical workspace for SMBs engaged in commerce,” Scriven told TechCrunch. “If you are in the market looking for 10,000 square feet of industrial warehouse space, you are effectively pushed to the fringes of the real estate ecosystem and then the entrepreneurial ecosystem at large. This is costing companies in significant but untold ways.”

Now, Saltbox has completed a $10.6 million Series A round of financing led by Palo Alto-based Playground Global that included participation from XYZ Venture Capital and proptech-focused Wilshire Lane Partners in addition to existing backers Village Capital and MetaProp. The company plans to use its new capital primarily to expand into new markets.

The company’s customers are typically SMB e-commerce merchants “generating anywhere from $50,000 to $10 million a year in revenue,” according to Scriven.

He emphasizes that the company’s value prop is “quite different” from a traditional flex office/co-working space.

“Our members are reliant upon us to support critical workflows,” Scriven said. 

Besides e-commerce occupants, many service-based businesses are users of Saltbox’s offering, he said, such as those providing janitorial services or that need space for physical equipment. The company offers all-inclusive pricing models that include access to loading docks and a photography studio, for example, in addition to utilities and Wi-Fi.

Image Credits: Saltbox

Image Credits: Saltbox

The company secures its properties with a mix of buying and leasing by partnering with institutional real estate investors.

“These partners are acquiring assets and in most cases, are funding the entirety of capital improvements by entering into management or revenue share agreements to operate those properties,” Scriven said. He said the model is intentionally different from that of “notable flex space operators.”

“We have obviously followed those stories very closely and done our best to learn from their experiences,” he added. 

Investor Adam Demuyakor, co-founder and managing partner of Wilshire Lane Partners, said his firm was impressed with the company’s ability to “structure excellent real estate deals” to help them continue to expand nationally.

He also believes Saltbox is “extremely well-positioned to help power and enable the next generation of great direct to consumer brands.”

Playground Global General Partner Laurie Yoler said the startup provides a “purpose-built alternative” for small businesses that have been fulfilling orders out of garages and self-storage units.

Saltbox recently hired Zubin Canteenwalla  to serve as its chief operating offer. He joined Saltbox from Industrious, an operator co-working spaces, where he was SVP of Real Estate. Prior to Industrious, he was EVP of Operations at Common, a flexible residential living brand, where he led the property management and community engagement teams.

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Grocery startup Mercato spilled years of data, but didn’t tell its customers

A security lapse at online grocery delivery startup Mercato exposed tens of thousands of customer orders, TechCrunch has learned.

A person with knowledge of the incident told TechCrunch that the incident happened in January after one of the company’s cloud storage buckets, hosted on Amazon’s cloud, was left open and unprotected.

The company fixed the data spill, but has not yet alerted its customers.

Mercato was founded in 2015 and helps over a thousand smaller grocers and specialty food stores get online for pickup or delivery, without having to sign up for delivery services like Instacart or Amazon Fresh. Mercato operates in Boston, Chicago, Los Angeles, and New York, where the company is headquartered.

TechCrunch obtained a copy of the exposed data and verified a portion of the records by matching names and addresses against known existing accounts and public records. The data set contained more than 70,000 orders dating between September 2015 and November 2019, and included customer names and email addresses, home addresses, and order details. Each record also had the user’s IP address of the device they used to place the order.

The data set also included the personal data and order details of company executives.

It’s not clear how the security lapse happened since storage buckets on Amazon’s cloud are private by default, or when the company learned of the exposure.

Companies are required to disclose data breaches or security lapses to state attorneys-general, but no notices have been published where they are required by law, such as California. The data set had more than 1,800 residents in California, more than three times the number needed to trigger mandatory disclosure under the state’s data breach notification laws.

It’s also not known if Mercato disclosed the incident to investors ahead of its $26 million Series A raise earlier this month. Velvet Sea Ventures, which led the round, did not respond to emails requesting comment.

In a statement, Mercato chief executive Bobby Brannigan confirmed the incident but declined to answer our questions, citing an ongoing investigation.

“We are conducting a complete audit using a third party and will be contacting the individuals who have been affected. We are confident that no credit card data was accessed because we do not store those details on our servers. We will continually inform all authoritative bodies and stakeholders, including investors, regarding the findings of our audit and any steps needed to remedy this situation,” said Brannigan.


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Claiming a landmark in fusion energy, TAE Technologies sees commercialization by 2030

In a small industrial park located nearly halfway between Los Angeles and San Diego, one company is claiming to have hit a milestone in the development of a new technology for generating power from nuclear fusion.

The twenty year old fusion energy technology developer TAE Technologies said its reactors could be operating at commercial scale by the end of the decade, thanks to its newfound ability to produce stable plasma at temperatures over 50 million degrees (nearly twice as hot as the sun), .

The promise of fusion energy, a near limitless energy source with few emissions and no carbon footprint, has been ten years out for the nearly seventy years since humanity first harnessed the power of nuclear energy.  But a slew of companies including TAE, General Fusion, Commonwealth Fusion Systems and a host of others across North America and around the world are making rapid advancements that look to bring the technology from the realm of science fiction into the real world.

For TAE Technologies, the achievement serves as a validation of the life’s work of Norman Rostoker, one of the company’s co-founders who had devoted his life to fusion energy research and died before he could see the company he helped create reach its latest milestone.

“This is an incredibly rewarding milestone and an apt tribute to the vision of my late mentor, Norman Rostoker,” said TAE’s current chief executive officer, Michl Binderbauer, in a statement announcing the company’s achievement. “Norman and I wrote a paper in the 1990s theorizing that a certain plasma dominated by highly energetic particles should become increasingly better confined and stable as temperatures increase. We have now been able to demonstrate this plasma behavior with overwhelming evidence. It is a powerful validation of our work over the last three decades, and a very critical milestone for TAE that proves the laws of physics are on our side.”

Rostoker’s legacy lives on inside TAE through the company’s technology platform, called, appropriately, “Norman”. In the last 18 months that technology has demonstrated consistent performance, reaching over 50 million degrees in several hundred test cycles.

Six years ago, the company had proved that its reactor design could sustain plasma indefinitely — meaning that once the switch is flipped on a reaction, that fusion reaction can continue indefinitely. Now, the company said, it has achieved the necessary temperatures to make its reactors commercially viable.

It’s with these milestones behind it that TAE was able to raise an additional $280 million in financing, bringing its total up to $880 million and making it one of the best financed private nuclear fusion endeavors in the world.

“The Norman milestone gives us a high degree of confidence that our unique approach brings fusion within grasp technologically and, more important, economically,” Binderbauer said. “As we shift out of the scientific validation phase into engineering commercial-scale solutions for both our fusion and power management technologies, TAE will become a significant contributor in modernizing the entire energy grid.”

The company isn’t generating energy yet, and won’t for the foreseeable future. The next goal for the company, according to Binderbauer, is to develop the technology to the point where it can create the conditions necessary for making energy from a fusion reaction.

“The energy is super tiny. It’s immaterial. It’s a needle in the haystack,” Binderbauer said. “In terms of its energy discernability, we can use it for diagnostics.”

TAE Technologies Michl Binderbauer standing next to the company’s novel fusion reactor. Image Credit: TAE Technologies

Follow the sun

It took $150 million and five iterations for TAE Technologies to get to Norman, its national laboratory scale fusion device. The company said it conducted over 25,000 fully-integrated fusion reactor core experiments, optimized using machine learning programs developed in collaboration with Google and processing power from the Department of Energy’s INCITE program, which leverages exascale-level computing, TAE Technologies said.

The new machine was first fired up in the summer of 2017. Before it could even be constructed TAE Technologies went through a decade of experimentation to even begin approaching the construction of a physical prototype. By 2008, the first construction began on integrated experiments to make a plasma core and infuse it with some energetic particles. The feeder technology and beams alone cost $100 million, Binderbauer said. Then the company needed to develop other technologies like vacuum conditioning. Power control mechanisms also needed to be put in place to ensure that the company’s 3 megawatt power supply could be stored in enough containment systems to power a 750 megawatt energy reaction.

Finally, machine learning capabilities needed to be tapped from companies like Google and compute power from the Department of Energy had to be harnessed to manage computations that could take what had been the theorems that defined Rostoker’s life’s work, and prove that they could be made real.

“By the time Norman became an operating machine we had four generations of devices preceding it. Out of those there were two fully integrated ones and two generations of incremental machines that could do some of it but not all of it.”

Fusion energy’s burning problems

While fusion has a lot of promise as a zero-carbon source of energy, it’s not without some serious limitations, as Andy Jassby, the former principal physicist at the Princeton Plasma Physics Lab noted in a 2017 Bulletin of the Atomic Scientists article.

Jassby wrote:

Earth-bound fusion reactors that burn neutron-rich isotopes have byproducts that are anything but harmless: Energetic neutron streams comprise 80 percent of the fusion energy output of deuterium-tritium reactions and 35 percent of deuterium-deuterium reactions.

Now, an energy source consisting of 80 percent energetic neutron streams may be the perfect neutron source, but it’s truly bizarre that it would ever be hailed as the ideal electrical energy source. In fact, these neutron streams lead directly to four regrettable problems with nuclear energy: radiation damage to structures; radioactive waste; the need for biological shielding; and the potential for the production of weapons-grade plutonium 239—thus adding to the threat of nuclear weapons proliferation, not lessening it, as fusion proponents would have it.

In addition, if fusion reactors are indeed feasible—as assumed here—they would share some of the other serious problems that plague fission reactors, including tritium release, daunting coolant demands, and high operating costs. There will also be additional drawbacks that are unique to fusion devices: the use of a fuel (tritium) that is not found in nature and must be replenished by the reactor itself; and unavoidable on-site power drains that drastically reduce the electric power available for sale.

TAE Technologies is aware of the problems, according to a spokesperson for the firm, and the company has noted the issues Jassby raised in its product development, the spokesperson said.

“All the callouts to tritium is exactly why TAE has been focused on pB-11 as its feedstock from the very beginning (early 90’s).  TAE will reach D-T conditions as a natural stepping stone to pB-11, cause it cooks at ‘only’ 100M c, whereas pB-11 is upwards of 1M c,” the spokesperson wrote in a response. “It would seem like a much harder accomplishment to then scale to 1M, but what this milestone proves is the ‘Scaling law’ for the kind of fusion TAE is generating – in an FRC (the linear design of “Norman”, unlike the donut Tokamaks) the hotter the plasma, the more stable it becomes. It’s the opposite of a [Tokamak].  The milestone gives them scientific confidence they can increase temps beyond DT to pB11 and realize fusion with boron — cheap, aneutronic, abundant — the ideal terrestrial feedstock (let’s not get into mining the moon for helium-3!).”

As for power concerns, the TAE fusion reactor can convert a 2MW grid feed into 750MW shots on the machine without taking down Orange County’s grid (and needing to prove it to SCE), and scale power demand in microseconds to mold and course-correct plasmas in real-time, the spokesperson wrote.

In fact, TAE is going to spin off its power management technology into a separate business focused on peak shaving, energy storage and battery management on the grid and in electric vehicles.

A “safer” fusion technology?

The Hydrogen-Boron, or p-B11, fuel cycle is, according to the company, the most abundant fuel source on earth, and will be the ultimate feedstock for TAE Technologies’ reactor, according to the company. But initially, TAE, like most of the other companies currently developing fusion technologies will be working with Deuterium-Tritium as its fuel source.

The demonstration facility “Copernicus” which will be built using some of the new capital the company has announced raising, will start off on the D-T fuel cycle and eventually make the switch. Over time, TAE hopes to license the D-T technology while building up to its ultimate goal.

Funding the company’s “money by milestone” approach are some fo the world’s wealthiest families, firms, and companies. Vulcan, Venrock, NEA, Wellcome Trust, Google, and the Kuwait Investment Authority are all backers. So too, are the family offices of Addison Fischer, Art Samberg, and Charls Schwab.

“TAE is providing the miracles the 21st century needs,” said Addison Fischer, TAE Board Director and longtime investor who has been involved with conservation and environmental issues for decades. Fischer also founded VeriSign and is a pioneer in defining and implementing security technology underlying modern electronic commerce. “TAE’s most recent funding positions the company to undertake their penultimate step in implementing sustainable aneutronic nuclear fusion and power management solutions that will benefit the planet.”

#department-of-energy, #energy, #energy-storage, #fusion-power, #google, #los-angeles, #nea, #nuclear-energy, #nuclear-fusion, #san-diego, #tc, #venrock, #verisign, #vulcan

Startups have about $1 trillion worth of reasons to love the Biden infrastructure plan

The sweeping infrastructure package put forward today by President Joe Biden comes with a price tag of roughly $2 trillion (and hefty tax hikes) but gives startups and the broader tech industry about $1 trillion worth of reasons to support it.

Tech companies have spent the past decade or more developing innovations that can be applied to old-world industries like agriculture, construction, energy, education, manufacturing and transportation and logistics. These are industries where structural impediments to technology adoption have only recently been broken down by the advent of incredibly powerful mobile devices.

Now, these industries are at the heart of the President’s plan to build back better, and the hundreds of billions of dollars that are earmarked to make America great again will, either directly or indirectly, be a huge boost to a number of startups and large tech companies whose hardware and software services will enable much of the work the Biden administration wants done.

“The climate-oriented investment in Biden’s new plan would be roughly ten times what came through ARRA,” wrote Shayle Kann, a partner with the investment firm, Energy Impact Partners. “It would present a huge opportunity for a variety of climate tech sectors, ranging from clean electricity to carbon management to vehicle electrification.”

Much of this will look and feel like a Green New Deal, but sold under a package of infrastructure modernization and service upgrades that the country desperately needs.  Indeed, it’s hard to invest in infrastructure without supporting the kind of energy efficiency and renewable development plans that are at the core of the Green New Deal, since efficiency upgrades are just a part of the new way of building and making things.

Over $700 billion of the proposed budget will go to improving resiliency against natural disasters; upgrading critical water, power, and internet infrastructure; and rehabilitating and improving public housing, federal buildings, and aging commercial and residential real estate.

Additionally there’s another roughly $400 billion in spending earmarked for boosting domestic manufacturing of critical components like semiconductors; protecting against future pandemics; and creating regional innovation hubs to promote venture capital investment and startup development intended to “support the growth of entrepreneurship in communities of color and underserved communities.”

Climate resiliency 

Given the steady drumbeat of climate disasters that hit the U.S. over the course of 2020 (and their combined estimated price tag of nearly $100 billion), it’s not surprising that the Biden plan begins with a focus on resiliency.

The first big outlay of cash outlined in the Biden plan would call for $50 billion in financing to improve, protect and invest in underserved communities most at risk from climate disasters through programs from the Federal Emergency Management Agency, Department of Housing and Urban Development, and new initiatives from the Department of Transportation. Most relevant to startups is the push to fund initiatives and technologies that can help prevent or protect against extreme wildfires; rising sea levels and hurricanes; new agriculture resource management; and “climate-smart” technologies.

As with most of Biden’s big infrastructure initiatives, there are startups tackling these issues. Companies like Cornea, Emergency Reporting, Zonehaven are trying to solve different facets of the fire problem; while flood prediction and weather monitoring startups are floating up their services too. Big data analytics, monitoring and sensing tools, and robotics are also becoming fixtures on the farm. For the President’s water efficiency and recycling programs, companies like Epic CleanTec, which has developed wastewater recycling technologies for residential and commercial buildings.

Fables of the reconstruction

Energy efficiency and building upgrades represent by far the biggest chunk of the Biden infrastructure package — totaling a whopping $400 billion of the spending package and all devoted to upgrading homes, offices, schools, veteran’s hospitals and federal buildings.

It gives extra credence to the thesis behind new climate-focused funds from Greensoil Proptech Ventures and Fifth Wall Ventures, which is raising a $200 million investment vehicle to focus on energy efficiency and climate tech solutions.

As Fifth Wall’s newest partner Greg Smithies noted last year, there’s a massive opportunity in building retrofits and startup technologies to improve efficiency.

“What excites me about this space is that there’s so much low-hanging fruit. And there’s $260 trillion worth of buildings,” Smithies said last year. “The vast majority of those are nowhere up to modern codes. We’re going to have a much bigger opportunity by focusing on some not-so-sexy stuff.”

Decarbonizing real estate can also make a huge difference in the fight against global climate change in addition to the its ability to improve quality of life and happiness for residents. “Real estate consumes 40% of all energy. The global economy happens indoors,” said Fifth Wall co-founder Brendan Wallace, in a statement. “Real estate will be the biggest spender on climate tech for no other reason than its contribution to the carbon problem.”

The Biden plan calls on Congress to enact new grant programs that award flexible funding to jurisdictions that take concrete steps to eliminate barriers to produce affordable housing. Part of that will include $40 billion to improve the infrastructure of the public housing in America.

It’s a project that startups like BlocPower are already deeply involved in supporting.

“Get the superhero masks and capes out. The Biden Harris Climate announcement is literally a plan to save the American economy and save the planet. This is Avengers Endgame in real life. We can’t undo the last five years… but we can make smart, massive investments in the climate infrastructure of the future,” wrote Donnel Baird, the chief executive and founder of BlocPower. “Committing to electrify 2 million American buildings, moving them entirely off of fossil fuels is exactly that — an investment in America leading theway towards creating a new industry creating American jobs that cannot be outsourced, and beginning to reduce the 30% of greenhouse gas emissiosn that come from buildings.”

As part of the package that directly impacts startups, there’s a proposal for a $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment, according to the White House. The focus will be on distributed energy resources, retrofits of residential, commercial and municipal buildings; and clean transportation. A focus there will be on disadvantaged communities that haven’t had access to clean energy investments.

Financing the future startup nation

“From the invention of the semiconductor to the creation of the Internet, new engines of economic growth have emerged due to public investments that support research, commercialization, and strong supply chains,” the White House wrote. “President Biden is calling on Congress to make smart investments in research and development, manufacturing and regional economic development, and in workforce development to give our workers and companies the tools and training they need to compete on the global stage.”

To enable that, Biden is proposing another $480 billion in spending to boost research and development — including $50 billion for the National Science Foundation to focus on semiconductors and advanced communications technologies, energ technologies and biotechnology. Another $30 billion is designed to be targeted toward rural development; and finally the $40 billion in upgrading research infrastructure.

There’s also an initiative to create ARPA-C, a climate focused Advanced Research Projects Agency modeled on the DARPA program that gave birth to the Internet. There’s $20 billion heading toward funding climate-focused research and demonstration projects for energy storage, carbon capture and storage, hydrogen, advanced nuclear and rare earth  element separations, floating off shore wind, biofuel/bioproducts, quantum computing and electric vehicles.

The bulk of Biden’s efforts to pour money into manufacturing represents another $300 billion in potential government funding. That’s $30 billion tickets for biopreparedness and pandemic preparedness; another $50 billion in semiconductor manufacturing and research; $46 billion for federal buying power for new advanced nuclear reactors and fuel, cars, ports, pumps and clean materials.

Included in all of this is an emphasis on developing economies fairly and equally across the country — that means $20 billion in regional innovation hubs and a Community Revitalization Fund, which is designed to support innovative, community-led redevelopment efforts and $52 billion in investing in domestic manufacturers — promoting rural manufacturing and clean energy.

Finally for startups there’s a $31 billion available for programs that give small businesses access to credit, venture capital, and R&D dollars. Specifically, the proposal calls for funding for community-based small business incubators and innovation hubs to support growth in communities of color and underserved communites.

Water and power infrastructure 

America’s C- grade infrastructure has problems extending across the length and breadth of the country. It encompasses everything from crumbling roads and bridges to a lack of clean drinking water, failing sewage systems, inadequate recycling facilities, and increasing demands on power generation, transmission and distribution assets that the nation’s electricity grid is unable to meet.

“Across the country, pipes and treatment plants are aging and polluted drinking water is endangering public health. An estimated six to ten million homes still receive drinking water through lead pipes and service lines,” the White House wrote in a statement.

To address this issue, Biden’s calling for an infusion of $45 billion into the Environmental Protection Agency’s Drinking Water State Revolving Fund and Water Infrastructure Improvements for the Nation Act grants. While that kind of rip and replace project may not directly impact startups, another $66 billion earmarked for upgrades to drinking water, wastewater and stormwater systems and monitoring and managing the presence of contaminants in water will be a huge boon for the vast array of water sensing and filtration startups that have flooded the market in the past decade or more (there’s even an entire incubator dedicated to just water technologies).

The sad fact is that water infrastructure in America has largely failed to keep up in large swaths of the country, necessitating this kind of massive capital infusion.

And what’s true for water is also true increasingly true for power. Outages cost the U.S. economy upwards of $70 billion per year, according to the White House. So when analysts compare those economic losses to a potential $100 billion outlay, the math should be clear. For startups that math equals dollar signs.

Calls to build a more resilient transmission system should be music to the ears of companies like Veir, which is developing a novel technology for improving capacity on transmission lines (a project that the Biden administration explicitly calls out in its plan).

The Biden plan also includes more than money, calling for the creation of a new Grid Deployment Authority within the Department of Energy to better leverage rights-of-way along roads and railways and will support financing tools to develop new high-voltage transmission lines, the White House said.

The administration doesn’t stop there. Energy storage and renewable technologies are going to get a boost through a clutch of tax credits designed to accelerate their deployment. That includes a ten-year extension and phase down of direct-pay investment tax credits and production tax credits. The plan aslo calls for clean energy block grants and calls for the government to purchase nothing but renewable energy all day for federal buildings.

Complimenting this push for clean power and storage will be a surge in funding for waste remediation and cleanup, which is getting a $21 billion boost under Biden.

Companies like Renewell Energy, or various non-profits that are trying to plug abandoned oil wells, can play a role here. There’s also the potential to recover other mineral deposits or reuse the wastewater that comes from these wells. And here, too, investors can find early stage businesses looking for an angle. Part of the money frm the Biden plan will aim to redevelop brownfields and turn them into more sustainable businesses.

That’s where some of the indoor agriculture companies, like Plenty, Bowery Farms, AppHarvest could find additional pots of money to turn unused factory and warehouse space into working farms. Idled factories could also be transformed into hubs for energy storage and community based power generation and distribution facilities, given their position on the grid.

“President Biden’s plan also will spur targeted sustainable, economic development efforts through the Appalachian Regional Commission’s POWER grant program, Department of Energy retooling grants for idled factories (through the Section 132 program), and dedicated funding to support community-driven environmental justice efforts – such as capacity and project grants to address legacy pollution and the cumulative impacts experienced by frontline and fenceline communities,” the White House wrote.

Key to these redevelopment efforts will be the establishment of pioneer facilities that demonstrate carbon capture retrofits for large steel, cement, and chemical production facilities. But if the Biden Administration wanted to, its departments could go a step further to support lower emission manufacturing technologies like the kind companies including Heliogen, which is using solar power to generate energy for a massive mining operation, or Boston Metal, which is partnering with BMW on developing a lower emission manufacturing process for steel production.

Critical to ensuring that this money gets spent is a $25 billion commitment to finance pre-development activities, that could help smaller project developers, as Rob Day writes in Forbes.

“As I’ve written about elsewhere, local project developers are key to getting sustainability projects built where they will actually do the most good — in the communities hit hardest by both local pollution and climate change impacts. These smaller project developers have lots of expenses they must pay just to get to the point where private-sector infrastructure construction investments can come in,” Day wrote. “Everyone in sustainability policy talks about supporting entrepreneurs, but in reality much of the support is aimed at technology innovators and not these smaller project developers who would be the ones to actually roll out those technology innovations. Infrastructure investors are typically much more reticent to provide capital before projects are construction-ready.”

Building a better Internet

“Broadband internet is the new electricity. It is necessary for Americans to do their jobs, to participate equally in school learning, health care, and to stay connected,” the White House wrote. “Yet, by one definition, more than 30 million Americans live in areas where there is no broadband infrastructure that provides minimally acceptable speeds. Americans in rural areas and on tribal lands particularly lack adequate access. And, in part because the United States has some of the highest broadband prices among OECD countries, millions of Americans can’t use broadband internet even if the infrastructure exists where they live.”

The $100 billion that the Biden Administration is earmarking for broadband infrastructure includes goals to meet 100 percent high-speed broadband coverage and prioritizes support for networks owned, operated, or faffiliated with local governments, non-profits and cooperatives.

Attendant with the new cash is a shift in regulatory policy that would open up opportunities for municipally-owned or affiliated providers and rural electric co-ops from competing with prive providers and requiring internet providers to be more transparent about their pricing. This increased competition is good for hardware vendors and ultimately could create new businesses for entrepreneurs who want to become ISPs of their own.

Wander is one-such service providing high speed wireless internet in Los Angeles.

“Americans pay too much for the internet – much more than people in many other countries – and the President is committed to working with Congress to find a solution to reduce internet prices for all Americans, increase adoption in both rural and urban areas, hold providers accountable, and save taxpayer money,” the White House wrote.

 

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